Mobile carriers are hoping to move away from their heavy reliance on Qualcomm in favor of more cost-effective mobile chipsets from China-based Huawei Technologies, some industry sources say.
Local carriers are rolling out new, faster-broadband LTE-A telecom services. LTE-A stands for "long-term evolution advanced"; also called fourth-generation technology, it allows users to download and process data much faster.
All three of Korea's major mobile carriers ― SK Telecom, KT and LG Uplus ― are investing in LTE-A technology in an effort to expand coverage and achieve nationwide interoperability.
Analysts and mobile carrier representatives believe Qualcomm has the advantage over Korean carriers, even in this "LTE-A era," because its chips support all key technical specifications and standards.
SK Telecom hopes to offer LTE-A speeds of up to 225 megabits per second to customers using Samsung Electronics' Galaxy S5 smartphone. The fastest speed it offers now is 75 megabits per second.
The new LTE-A service will allow customers to download 800-megabyte movies in less than 29 seconds, said SK Telecom.
This breakthrough will be possible thanks to carrier aggregation technology that combines 10-megahertz and 20-megahertz bands (data pathways).
SK Telecom's LTE-A uses Qualcomm's processors and modem chips.
"Without Qualcomm mobile chip solutions, it's not possible to offer our LTE-A service to our customers," said an official at SKT.
The situation is not much different for KT and LG Uplus, which are also relying on Qualcomm's patented Snapdragon 805-branded processor to upgrade their LTE-A service. Speeds will be up to 300 megabits per second by the end of this year, company representatives say.
Mobile carriers say an imminent farewell to Qualcomm is highly unlikely; however, they are working to diversify their procurement channels for core chip technologies.
LG Uplus, the nation's smallest carrier, has been aggressive in pursuing joint projects with Huawei Technologies ― mostly carrier aggregation technology projects that stand to improve LTE-A speeds by increasing the number of pathways on which data can travel.
For Uplus, Huawei is a crucial partner because the local carrier relies entirely on Huawei's equipment to challenge SK Telecom and KT in the heated LTE-A network race.
"The partnership between LG and Qualcomm remains strong," said an official from one of LG's technology affiliates. "But we need to diversify procurement channels for LTE technologies at better pricing."
LG's chief rival, KT, is also expanding its partnership with Huawei to mobile networks (as opposed to fixed networks). KT executives said KT and Huawei were partnering on projects of mutual interest.
"Things may change depending on the situation," said a KT official who did not wish to be identified. "We may eventually use Huawei's chipsets for LTE-A service, though it will take some more time."
SK Telecom also said it was looking at expanding its chipset sourcing channels.
Huawei recently conducted a test to see if it could push download speeds as high as 300 megabits per second. The company is expected to continue to invest in research into faster network technologies.
By strengthening alliances with Korean carriers, Huawei aims to sell its advanced wireless equipment and related technologies to countries in Africa and South America, where LTE-A service is gaining attention.
"To win more deals in new business areas such as LTE-A, Huawei needs good references," said an official who is familiar with Huawei's business activities in Korea. "In terms of [building its reputation], increased partnership with Korean carriers is significant."
Korea is a market Qualcomm can ill afford to lose, officials say, as the U.S. company is eyeing the Chinese LTE-A market and markets in European countries as well as those on its home turf.
LTE-A is expanding its reach, with nine commercial deployments globally as of today and 40 networks expected to have LTE-A by year-end, according to the trade group 4G Americas.
Attempts by Huawei to expand partnerships with Korean carriers may generate controversy in Korea, as the U.S. government is still concerned about the security implications of using Huawei gear in Korea.
Huawei has been blocked from buying or sharing ownership with three U.S. telecommunications firms since the mid-2000s over U.S. intelligence concerns stemming from the company's links to the Chinese intelligence service and the Chinese military.
Australia's government also banned Huawei equipment, and in the United Kingdom its equipment undergoes routine checks for spying capabilities.